Britain is now, per head, the world's largest giver of overseas aid. If any issue shows the huge gulf between the Westminster village and the wider mass public then this surely is it. While David Cameron buzzes with pride at this accomplishment, the mass public shake their heads in horror and disgust at the £8 billion bill. As every domestic budget is cut, excluding the severely overstretched NHS, and as millions find themselves struggling with rising energy, food and living costs, the notion of the aid budget growing – and the government taking pride in this – is to most people literally stunning. Research by YouGov published at PoliticsHome found 56% disapprove.

David Cameron and the International Development Secretary Andrew Mitchell have attempted to defend the aid budget on two grounds, which I would suggest are two wholly different types of aid: the first being "defensive aid", that is aid with national security and strategic objectives as the guiding force, such as stopping Al Qaeda taking hold of a failing state; and the second being "humanitarian", with the sole purpose of helping alleviate poverty, disease and suffering.

The fact that these two types of "aid" are lumped together shows somewhat the muddled thinking surrounding this budget. I would argue that aid with security and strategic objectives is a military matter, best overseen by the MOD, and requires a rather different style of thinking, analysis and system of implementation than aid with the objective of reducing malaria, for example.

Defensive aid needs targeting with military precision, with clear and well defined objectives based on perceived threats, and requires a very cold, hard-headed analysis of its effectiveness – or otherwise – with regards to fulfilling those desired outcomes. Defensive aid, I would also argue, shouldn't have an annual budget – which simply encourages the department to spend up to that limit and restricts spending to that limit – but instead have each project assessed as an individual extra cost, directly by the Government and Treasury. That way the "defensive aid" budget could fluctuate, as needed, from zero upwards with no set limit, and all spending be fully assessed for outcomes. It may be that defensive aid is effective, it may be a waste of money, it may even aggravate situations, but this way we'd know and be able to act to increase or decrease spending, expand or axe programmes, etc, with full information and clear aims, without other complications.

Humanitarian aid is, by contrast, a wholly different matter to "defensive aid", being purely altruistic rather than being lead partially if not entirely by self-interest. It does however cause a moral dilemma: is it right for the government to fund via taxation what is, in effect, a charitable operation? I agree with Andrew Mitchell when he says "charity begins at home but does not end at home"; but when "charity" becomes nationalised, is it still properly charity? I would say it isn't. Now this is not to say that helping poorer nations isn't our responsibility, but is it the responsibility of us as individuals or of our government?

It is true that, as Andrew Mitchell put it, "for £2.22, the price of a Starbucks cup of coffee, you can vaccinate nine kids". Indeed, as he added, this is "absolutely awesome", both for third world children and Starbuck's obviously giant profit margins. He is also right when he says, referencing the aim of spending 0.7% of GDP on aid, that if you had a pound and one penny could save a life, you'd spend it. Of course you would. The problem with government spending on moral aims is two fold: it isn't their money, and where does it stop? If 0.7%, why not 1.7%, or 2.7%? If one penny saves a life, why not ten, twenty, fifty? The fact of the matter is we aren't talking about a penny, or a £2.22 cup of coffee, but rather a figure nearing £8 billion, or roughly £130 per man, woman and child in the UK every year, rising to £12 billion or £200 per head by 2015. Where does it stop? By accepting the nationalisation of this charitable objective, we have accepted the principle of taxation for aid and that is an unlimited concept; there is no ceiling.

Foreign aid has become rather like other spending was under New Labour, being seen as a good in itself, and forgetting that – to quote a former Prime Minister – "there is no such thing as an entitlement unless someone has first met an obligation". When the government pledges aid they are not spending their own money, they are spending other people's money – the vast majority of which have considerably less than they do personally, and a large number of whom are struggling themselves – and unlike other spending such as health or welfare they receive no benefit (so it cannot be described as a quasi-insurance, as say tax funded Jobseekers' Allowance or the NHS can).

It appears, as Sir Humphrey once remarked in Yes, Minister, that this spending "is to make everyone [feel] better. Better for showing the extent of their care and compassion…Parliament and the country feel cleansed, purified, absolved". This is personally a cheap way of feeling good – it's always cheaper to feel good spending other people's money rather than your own, just ask tax exiled yet foreign aid demanding Bono – but to continue the foreign aid budget the Government is siding with "big government" over voluntary "big society", risking public backlash – four in ten now say they see David Cameron in a more negative light since the aid pledge – and continuing the shift of responsibility to the State and away from us as individuals. It's the nationalisation of charity.

And that last point is perhaps the most important. Too often we as a nation wish to shift responsibility to the State for our own ease, whether that's logistical ease as with caring for elderly relatives or financial and moral ease, as with aid and the arts. We cannot go on like this. Ultimately it is our responsibility, as individuals, to fund charitable things as we see fit. The government can help – a tick box on income tax returns to donate an extra percentage (or more) of income for aid or arts would be a great idea – but to fund these things by forceful collection of taxes, at any time let alone during budget cuts, isn't the basis of a "big society"; it's "big government", and can be described in ways as morally wrong.

Worst of all it may even be bad for the good causes as those that do care are made to feel sufficiently "good" about the aid budget, their "guilt" or "conscience" satisfied, and as a consequence donate less as individuals; the responsibility has been nationalised. Others resent being forced to pay and are less likely to give because of that anger; now 1 in 4 say they refuse to give to overseas charity, I suspect the percentage to be higher. (The arts in the US are a prime example of private charity thriving where the State is absent and suffering when the State contributes; likewise in the UK the arts are effectively nationalised and private charity minimal). This is always the case when something becomes seen as a government responsibility rather than a personal moral one; we feel we are doing our bit via taxes and so consequently do less as individuals -rather like Ebenezer Scrooge ("Are there no prisons, no poor houses?") – or we are angered at being forced to pay via taxes and so reject good causes as a result.

And so we are left with the moral dilemma of aid, but ultimately we must recognise that it is our responsibility as individuals – as the big society – and not of our government. The moral thing to do isn't to spend other people's money, it's to get our cheque books out; and that message is sadly not only absent from the government's message, but it's also ever more forgotten as the aid budget soars. Big government aid will kill big society charity, and that's a tragedy.